The Promise of Sale Agreement by Dr Notary Clinton Bellizzi B.A., LL.D.Last Updated on 03 January 2012
In sale of immovable property there needs to be an agreement in writing (private writing) specifying:
1: The Parties
Identification of parties: by means of ID cards/passports, father's name and surname, mother's name and surname, place and date of birth and current address with telephone number and email.
If Sellers are non-Maltese Citizens/residents or intend to leave the island before filing the following year's Income Tax return (June) a special Tax Clearance from the Commissioner of Inland Revenue (CIR) has to be applied for Sellers to authorise Notary to apply in their name.
If Buyers are non-EU residents, or EU residents who have not resided in Malta for over 5 years or do not intend residing in Malta as their ordinary residence then an Acquisition of Immovable Property (AIP) application must be filed (POS to include this condition).
Current Minimum requirements: €101,551 for flats/maisonettes and €169,205 for any other property; exceptions: Special Designated Areas (SDA).
2: Object
Precise identification and description of the property to be transferred including any rights/servitudes, restrictions, accessories. Ideally, one should have a copy of the Seller's title deed and take the description from it - one cannot sell more than what one actually owns.
3: Price/Consideration
One has to determine exactly what the consideration for the sale is - amount, currency, modality of payment - Balance of Price on final deed?; Part Exchange; split pricing for movables / works (fiscal implications)
Deposit: not a requirement at Law - customary to deposit 10% as a sign of goodwill on part of Buyer Deposit vs Earnest (Kapparra).
4: Validity
If nothing is mentioned in the POS - term is for 3 months ex lege. However, if no time limit is set and the POS is made subject to a suspensive condition (eg: Development / Building Permits) then Courts have interpreted this time limit to start running from when the suspensive condition verifies itself. If any of the parties does not appear on the final deed for no reason valid at Law – a Judicial letter demanding specific performance must be sent before the expiration of the term. Court case to be filed within 1 month otherwise POS is technically and legally expired - this procedure should NOT be used to extend the time limit in bad faith.
5: Other conditions
6: Registration
Parties to POS are to authorise Notary to register agreement with CIR in their name within 21 days. Payment of 20% of Duty on Documents due with registration. Any extension to original POS is also to be registered within 14 days. Any amendments to POS (price, property, parties) is to be notified in writing to CIR prior to publication of Final Deed.
Conclusion as Usual Category: Purchasing property in Malta Where is: http://77greatestates.wordpress.com/2010/06/01/purchasing-property-in-malta/ Posted in: Purchasing Property in Malta Purchasing Property in MaltaLast Updated on 01 June 2010 For many years, legislation has controlled the purchase of immovable property by non-residents. The reason is Malta's small size. Malta's membership in the EU has brought some relaxation to these restrictions in favour of EU member states nationals, however Malta obtained a derogation to continue to control such purchases. Purchases by Individuals: Citizens of all EU member states, who have resided in Malta continuously for a minimum period of 5 years at any time preceeding the date of acquisition may freely acquire any immovable property without the necessity of obtaining a permit. Citizens of all EU member states who have not resided continuously in Malta for a minimum period of 5 years may only purchase their primary residence or any immovable property required for their business activities or supply of services without the necessity of obtaining a permit. Citizens of all EU member states who have not resided continuously in Malta for a minimum period of 5 years, require a permit to acquire immovable property for secondary residence purposes ("second home" in Malta). Individuals who are not citizens of a European Member state may acquire immovable property provided they are granted a permit. However there are defined zones in Mata - usually high quality buildings in prime locations - referred to as special designated areas, where there are absolutely no restrictions to acquisition. There is also no restriction on acquisition through inheritance; there are also other special exemptions. Where property is purchased as a primary or secondary residence, with or without a permit, as the case may be, that property must be used as such. Furthermore, there are restrictions on allowing such properties to be rented out. Where a permit is required, the property must have a minimum value of €116,468 for a house or €69,881 for an apartment. In the purchase of a primary or secondary residence, (whether a permit is required or not) no other property must have been previously acquired by the purchaser save for property in a special designated area. Different rules apply to the acquisition by companies. Procedures: There are two legal stages: entering a promise of sale ("konvenju") followed by the signing of the deed of purchase ("kuntratt ta xiri"). The promise of sale agreement is a very important preliminary step, since once signed it is a binding promise on both parties to sell/purchase; it will contain all the terms and conditions of the transaction and cannot be ignored or annulled unless by agreement, or unless there is a good legal reason. Nor can any terms be added or changed without mutual agreement. The law requires this agreement and any extension thereof to be in writing and must be registered with the local competent authority for its validity. Once the promise of sale agreement is signed, the public notary - appointed by the purchaser - will carry out the necessary searches to ensure that the vendor has good title and that there are no undisclosed burdens on the property. Among other things, the promise of sale agreement will state whether the property is freehold, or whether it is subject to an annual ground rent (emphyteutical grant), and in such case, whether it is temporary or perpetual and whether the ground rent is revisable. The correctness of these fundamental aspects declared by the prospective seller are all verified by the Notary when carrying out the researches. The promise of sale agreement usually states a validity period that is a time limit - it is typically a 3 month one - by which the final deed should be published - if none is stated, then the law deems the period to be 3 months. The purchase is completed by the signing of the deed of sale, which is a public document. Stamp duty at usually 5% is payable to Government on the publication of the deed. And hey presto the buyer becomes the lucky owner of immovable property in Malta! For further information, kindly contact 77 Great Estates on (00356) 2125 2455; (00356) 9944 7444; skype: info.77GreatEstates or info@77GreatEstates.com. Posted in: Purchasing Property in Malta |
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